Telecoms shaken up in Europe’s bid for growth

STRASBOURG — The European Commission on Wednesday ushered in radical changes to the Continent’s telecoms market in an attempt to pry open monopolies, regulate calls made over the internet and weaken countries’ control over spectrum.

The sweeping reforms aim to prepare the bloc for a future that promises real-time, high-definition-quality entertainment for commuters; self-driving vehicles that must connect to the internet; artificially intelligent robots and constant health care monitoring. These advancements hinge on the next generation of technology known as 5G, and the rollout depends on Europe’s ability to stitch together the broadband wavelengths across countries.

The Commission has proposed a “European Electronic Communications code” that would push monopolies or businesses that control cable tunnels, pipes and other infrastructure that carry Europe’s fixed-line internet to open up to rival operators for upgrades.

“While basic broadband is available to every European, mainly enabled by legacy infrastructures, this is no longer good enough for the ongoing digital transformation,” the Commission said in its proposal.

The co-investment plan would encourage companies to work together, to get internet speeds in Europe up to at least 100 megabits per second by 2025. The proposal is now in the hands of the European Parliament for their input and there will be scramble by MEPs to lead the file through negotiations.

While nearly all Europeans have access to internet connections, most use it at speeds below 30 megabits per second. That’s fast enough to download movies and stream television but too slow and unreliable for self-driving cars and certain health technologies. In addition, millions of Europeans cannot afford basic internet service.

“Citizens demand speedy roll-out of super-fast networks and innovative services. We need to ensure that the new code provides technologically inclusive incentives,” said Steven Tas, chairman of ETNO, an industry association that represents BT, Orange and Telenor.

Much of the Continent’s internet infrastructure has piggybacked on the copper network created for traditional telephone calls. The old-fashioned wires can be upgraded using so-called vectoring technology to boost speeds to 100 megabits per second and possibly as fast as 250 megabits per second by 2018, according to Deutsche Telekom. However rivals including the U.K. telco giant Vodafone have argued that copper will never achieve the speeds or reliability of fiber optic cable.

“Effective access to ducts and poles of the SMP operator, is essential and welcome. However, in many cases this will not be the single “silver bullet” to ensure effective competition,” said telecoms lobbyist ECTA, which represents Vodafone and Iliad.

The reforms would require nations to free up 700 MHz spectrum, which is mainly used by public broadcasters. The Commission is prepared to play hardball with a “use it or lose it” proposition for countries. The EU’s telecoms regulator BEREC would be given greater powers to review national strategies for the release of spectrum. To encourage participation, telecom operators would have a minimum of 25 years access to the bandwidths.

“The proposal stops short of achieving the full harmonization of spectrum management and indefinite spectrum licenses. We encourage European institutions to be bold in in seeking to resolve this issue,” said Grégoire Verdeaux, Vodafone’s international policy director.

The reforms also tackle internet-based communication platforms, such as WhatsApp and Skype, by compelling them to provide services that traditional telephone operators provide, such as access to emergency numbers. These platforms must also increase security provisions.

“It may drive some popular communications options out of the market, reducing competition and preventing the release of new features in Europe,” said James Waterworth of lobbyist CCIA.

The Commission also promised to introduce 5G internet to one major city in each member country by 2020. Public services, such as schools, universities and hospitals, should have internet speeds of at least 1 gigabit per second, the institution added.

The Commission will also provide all European households with download speeds of more than 100 megabits per second, which can then be upgraded to gigabit speeds.

“We would welcome also a revision upwards of the 100 megabit per second connectivity target for European households by 2025,” said Vodafone’s Verdeaux. “We should set an ambition now for 1 gigabit speeds for everyone.”